Thursday

1st Jun 2023

EU finance ministers draw blank on new tax law

  • Semeta - 'great disappointment' on tax transparency (Photo: European Parliament)

Austria and Luxembourg have blocked an EU deal to increase tax transparency.

Their finance ministers dug in their heels at a meeting in Brussels on Tuesday (14 May) despite pressure from major EU states.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

Speaking to press after the event, EU taxation commissioner Algirdas Semeta described their intransigence as a "great disappointment."

He called on the EU to "get its house in order" on tax evasion and urged EU leaders to "rectify the situation" at a summit next week.

"We need full endorsement of the widest possible application of automatic exchange of information [on tax evaders] within the EU," he said.

For his part, Sven Giegold, a spokesman for the European Parliament's Green group, accused Austria and Luxemborg of "shameless obstructionism."

The tax deal concerns an overhaul of an eight-year-old EU law in order to close loopholes on data about income from trusts, foundations and pension funds.

It also concerns ending Austria and Luxembourg's - two financial centres - exemption from automatic exchange of data on tax cheats.

Luxembourg finance minister Luc Frieden and Austria's Maria Fektor said in a joint press conference on Tuesday that they cannot go ahead until legal uncertainties in the new draft law are clarified and until the UK cracks down on tax fraud in its overseas protectorates, such as the British Virgin Islands.

They also noted that they have given the go-ahead for the European Commission to start negotiations on ending bank secrecy in Andorra, Liechtenstein, Monaco, San Marino and Switzerland.

If the group of five agree to hand over data, Austria and Luxembourg's exemption from EU tax transparency will lapse.

The tax debate is now set to take centre stage at the summit on 22 May.

In a sign of increasing pressure on tax evasion as crisis-hit governments scramble to increase their revenues, 17 EU countries have signed a statement demanding the creation of a new global standard for automatic exchange of information.

The standard is to be based on the Foreign Account Tax Compliance Act (FATCA) passed by the US Congress in 2010.

The group - which includes France, Germany and the UK - called for a multilateral agreement to create "a truly global system of automatic information exchange which would mark a step change in our ability to tackle tax evasion."

In a 2012 study on behalf of the commission, Tax Research UK, a London-based think tank, estimated that EU governments lose up to €1 trillion each year to tax fraud.

EU targets tax evasion on savings

The EU commission wants to tighten tax loopholes for EU citizens who hold accounts in member states and in Switzerland, Andorra, San Marino, Monaco and Lichtenstein.

ECB: eurozone home prices could see 'disorderly' fall

The European Central Bank in its Financial Stability Review warned EU home prices could see a 'disorderly' fall as high mortgage rates are making houses unaffordable for households and unattractive for investors.

EU: national energy price-spike measures should end this year

"If energy prices increase again and support cannot be fully discontinued, targeted policies to support vulnerable households and companies — rather than wide and less effective support policies — will remain crucial," the commission said in its assessment.

Opinion

EU export credits insure decades of fossil-fuel in Mozambique

European governments are phasing out fossil fuels at home, but continuing their financial support for fossil mega-projects abroad. This is despite the EU agreeing last year to decarbonise export credits — insurance on risky non-EU projects provided with public money.

Latest News

  1. Europe's TV union wooing Lavrov for splashy interview
  2. ECB: eurozone home prices could see 'disorderly' fall
  3. Adapting to Southern Europe's 'new normal' — from droughts to floods
  4. Want to stop forced migration from West Africa? Start by banning bottom trawling
  5. Germany unsure if Orbán fit to be 'EU president'
  6. EU Parliament chief given report on MEP abuse 30 weeks before sanction
  7. EU clashes over protection of workers exposed to asbestos
  8. EU to blacklist nine Russians over jailing of dissident

Stakeholders' Highlights

  1. International Sustainable Finance CentreJoin CEE Sustainable Finance Summit, 15 – 19 May 2023, high-level event for finance & business
  2. ICLEISeven actionable measures to make food procurement in Europe more sustainable
  3. World BankWorld Bank Report Highlights Role of Human Development for a Successful Green Transition in Europe
  4. Nordic Council of MinistersNordic summit to step up the fight against food loss and waste
  5. Nordic Council of MinistersThink-tank: Strengthen co-operation around tech giants’ influence in the Nordics
  6. EFBWWEFBWW calls for the EC to stop exploitation in subcontracting chains

Join EUobserver

Support quality EU news

Join us